LOCO - Earnings call transcript Q3 2019 | El Pollo Loco Holdings, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings, and welcome to the El Pollo Loco Third Quarter 2019 Earnings Conference Call. [Operator Instructions].

On the call today, we have Bernard Acoca, President and Chief Executive Officer of El Pollo Loco; and Larry Roberts, Chief Financial Officer.

And now I'd like to turn the conference over to Larry Roberts.

Laurance Roberts

Thank you, Operator. afternoon. Good should our everyone earnings quarter access release. have now, third to XXXX By can www.elpolloloco.com found Relations not, be If it at section. in Investor the

everyone We materially uncertainties should statements a and actual are could are all from our Before need what to guarantees These of will that formal expect. statements our and of more not undue forward-looking that therefore, reliance performance, remind the them. for you include differ risks numerous risks impact results recent forward-looking we and we to results that cause today put operating our financial refer discussion also These filings you remarks, of could to statements. subject SEC future condition. future discussion our not begin to I on detailed

file We that to you for XX-Q we'd quarter earliest the review and tomorrow, of convenience. our expect to XXXX encourage document your at third

non-GAAP available evaluating of can we for believe comparable measures, measures results a will we today's substitute information additional earnings prepared isolation this performance. During our considered release. or should not as are accordance reconciliations GAAP. discuss to call, our And in which GAAP with be in in The in useful be presentation

now Executive I'd President turn over and call Officer, to to like the Chief Acoca. Bernard

Bernard Acoca

Good afternoon, all for joining thank Larry. everyone, Thanks, you and us today.

sales of sales. continue Our our on third restaurant quarter the X.X% progress straight comparable fifth positive in make to we our X-year system-wide restaurant sales accelerating executing agenda. a comparable as results representing or comparable growth demonstrated quarter momentum basis, transformation System-wide quarter restaurant X.X% was

in As out July. you may negative started we recall,

quarter. sales growth So we were pleased very improve throughout the see to

terms traffic, last the System was month is of from of restaurant positive particularly growth included given was X.X% year. of our In sales growth which fact, X% comparison year-to-date month September September in sales. impressive the the and comparable strongest in

October. positive continue and Our continued as system-wide sales comparable be quarter has to momentum fourth in transactions into the

the strong our to impact driven agenda, believe transformation current the expansion addition of capabilities In focus value. delivery we our being are the ongoing results and our of by on

we have adding Uber quarter, X including supplemented restaurants locations. now as Eats our We approximately the company-operated During all DoorDash Postmates of relationship all additional XXX both options delivery customers. marketplaces, on our and our for marketplaces by

In mix these this on have conjunction emphasis family we a expansion, menu been which increase more out in drive X% our third-party curated we places combos approximately seen thus Results approximately order with and delivery marketplaces. delivery from far have heavier to sales encouraging, rolled system through to meals profitable system-wide, a new and X%.

September, in Fire-Grilled include and popular entrée value The a promotion. we X well, a items our Also emphasized of extremely famous combos, of our our choice $X drink. which with mixed chips most through along Combos

value-engineered balance attractive success, our to $X restaurants, we good look promotion's our the to tremendous this offer the it the Given we XXXX. through Combos highlight highlight in to deliver been the will and we'll point. year it value but to advertising of on in our permanent continue customers, only basis at in they've a not very Fire-Grilled margins sustain and price

unique El even Following own promotion. tightly deliver. experiences and the holiday holidays on the We our products believe we are promotion, year the be sell excited a with are with and $X to can associated we close Fire-Grilled out Combos season the Loco we based Pollo the can

this into be what a the makes Pollo we the first time Loco, tapping way so in For huge time special. at year of ever, El celebrating will holidays

year new managed with on We which bowls. this spin to put tamale are back holiday holiday to Tamales, excited Handmade bring our our a have Chicken a favorite, we

and iconic red pozole annual feature verde, new served packaging and our tamale drinks new decadent festive of Abuelita holiday holiday soup; hot In be made food want Mexican classics: introducing also we traditional are become in holiday homemade our will chocolate holiday our our two an bowls, cups, brand. our chocolate. and addition Mexican with to to we All a which

looking featuring family a be the sent for a program cards beautiful that on gift gift perfect restaurants e-gift occasion. via can our be for X gift, digitally our friend we any lineup card elpolloloco.com. suitable those in either For purchased These will cards of new to are or or member

are opportunity accelerate we made very right top marketing product new we a recent XXXX, robust we our next that are some innovation In about promising As a And year. our products to to look to it momentum. is months, showcase new, pipeline. ahead culinary priority to test now we've excited biggest continue build eager to in

of we In drive be our November. it Along by Apple via the even customers these from and for will at beginning convenience Facebook to access to easier and Amazon's making we addition, rolling Alexa Chat ordering Messenger, continue order us. frictionless out Business lines,

provider We fourth our portfolio, slated marketplace to add in a is to are which to working delivery launch also December. Grubhub,

and maximize we media and bring between optimize promotions of marketing our efficiency and the media social exciting As effectiveness these mix in our to digital spend. to continue market, we television, initiatives order to

I As performance. the our transformation mentioned with we foundation sales our agenda for improved credit earlier, laying comparable

employee making our our progress be to it on I'd transformation or the touch to franchisee upon El agenda: now like simplifying strategic operations we've made third Pollo and Loco. an easier at of some pillar of

back-of-house simplification the On focusing order on front, reduce in been our complexity. to operations initiatives has team

simplified And completed process, easier we rollout make have in more an to much the our higher-quality new the chicken-cooking our focus delivers grill end, it restaurants we Loco. a at our be is and our consistent, Our work easier new training to masters. while product on employee franchisee making do of we Pollo El company-wide this everything virtually currently are which for system. management inventory To

In will all standard our further and of simplify procedures, restaurants. the completed rewriting our in addition, we've operating working streamlining which

to pages used XXX XX to be manual in length that pages. it reduced an operations We have and taken only

in to we that easier is or it be they X steps how our One work making recipes big that restaurants our ensure have in less. example made to we all of revised can of are

to excited roll extremely time on in focusing free spend out up as quarter the fourth delivering to they will customer exceptional for are initiatives employees more We experiences. these

And is I'm operations of we've is see really encouraging proud already our what team. results. that incredibly begun to improved

customers. since significantly mystery overall an score, all-time satisfaction year. measurement implemented on internal Our Index which is an Blended and based to program work so complaints, in to employees their and connection this on can energy that easier customer focus to our is a become it at more beginning start for at providing the has and us this of driver they sales the high expect restaurants surveys with this is key customer we of for continue operations we of just shops, believe make We improved of moments our as

crisis And do with committed has enables at culture heart where As focus in organization quarter, local need. end to leadership on to which the This building us throw evening the to every everything Connection, communities as of which proportions, business. to away partnership in program the epidemic communities a Donation we food helping we shelters donate used in which we we to participation doing the this a centered entered with to on homeless are our Food continued an goal can has our of donate we annually. to is the a Southern to Based year-end, commitment, have involves the to by we out In California which anticipate last are we us pounds will the system. get XX% over discussed been reached of part. on entire we XXX,XXX assist those food rolled enable

Along one above Greater Los continue homeless represents now amount, those of franchisees the put free and employees, shelters. area. we X. one, away number donate Angeles same share doing and give new donate and promotion, this a to a we took sold to Day sold twist typical XX,XXX of customers, of gimmicky the XX,XXX efforts which proud on the our we October pledged through get the at will which minimum people this I'm on local National tacos, tacos. lines, Any match to extremely we Taco to symbolically year, buy that tacos in place instead Instead

to that remaining strategy restaurants earlier The our transferred X company-operated today of we part final restaurants, our thing this is to week, I'd Dallas like our to in as refranchise opportunistically highlight Dallas franchisee market. We that under Pollo El in one our our on and bullish existing that restaurants owner and remain prospects consolidating market. franchisee in are excited long-term about partner Loco's

our it brand is I as the and special. and results your over to make thank like our for I that this dedication Before of people passion, all these making possible. would commitment employees partners, call and this truly franchisee Larry, To to family always, turn

our over call to like results now I'd hand in Larry third review quarter to detail. to the

Laurance Roberts

Thanks, Bernard.

provide to like first I'd base. our results, quarter third quick our into get on we Before update a store

Los new Angeles. company-operated During opened we the in quarter, one restaurant

expect for the along open restaurants company-operated X with full to X franchised year. to We to restaurants X X

continue we X. make Additionally, efforts, the restaurant franchisees completing remodel X on to completed our remodels in while quarter company-operated progress

beginning Our forward early new XXXX. and remodels is it design asset with completion, implementing work we to in near look

Now on to results. financial our

to decrease and subsequent sales, offset $XX.X XX, restaurants total revenue by our a closure partially and XXXX. in XXXX. company-operated an year. company-operated subsequent related of slightly increase growth during by period slight third was program. of transactions. restaurants sales XXXX the comparable in by to company-operated restaurant to X Company-operated million of XX X.X% of $XXX,XXX from last X.X% third revenue sale the decrease in was as sales million restaurant in from offset company-operated to increase the the the was For to The the restaurants of restaurant quarter The quarter in comparable This XXXX, quarter check the to the third restaurant of a opened third quarter and driven X.X% to ended average million new during compared revenue decreased $XXX.X September in $XXX.X increase compared and recognized the was $XXX point same in loyalty comprised million in partially contribution franchisees X

sale as the well the current As progression Bernard were quarter momentum. pleased fourth noted, as our we trends during of our with quarter

partially and This by new $X.X in closures comparable increase the X during to period. franchisees, XX restaurants from was X.X% contribution of compared restaurant the increased prior the increase same The quarter million to offset of X as driven a the revenue subsequent quarter to third the XXXX. company-operated during Franchise increase in was mentioned X.X% to earlier; transfer and the in year the franchised third sales; million period. restaurants by $X.X restaurant opened

was as decreased Turning sales due a cost mix. improvement Food prices company paper to sales restaurant expenses. points The year-over-year favorable predominantly to percentage and basis and XX.X%. to of menu higher XX

inflation year, to we ahead XXXX. X% of next in expect commodity X% approximately Looking to

primarily due percentage in to higher as year-over-year sales The XX company of higher related by and prices. compensation in a expenses expenses XX.X%. restaurant increased increased points Angeles; menu to Los and workers' was wages increase especially hourly expense, offset Labor California, labor basis partially

to We in expect X.X% XXXX, labor X% wage minimum labor of and continues inflation tight market reflect the increases. which to

Occupancy in costs offset and XX decreased XX.X% expenses a other of lower as operating and higher advertising marketplace costs percentage company points prices delivery to year-over-year restaurant fees. as sales basis increases and occupancy

decreased expenses to legal are XXXX. and Included securities the $X.X to G&A million executive million. of and expenses approximately General of administrative in by costs quarter related approximately $X.X litigation in associated compared $XXX,XXX to million with year-over-year transition $X.X third expenses

of points with expenses $XXX,XXX The year-over-year project primarily option increase costs, of total of associated spending. in to increased to expenses and X.X% stock G&A the due expense, executive approximately the costs for was basis third prior the XXXX approximately year. revenue severance higher G&A increase costs and the transition securities an versus Excluding quarter XX litigation in

million quarter XX decreased by or expense last as percentage to $X.X amortization company year-over-year year and a basis third from in of $X.X the Depreciation revenue. points million

recorded we Additionally, action to for million of associated received class income tax $X.X XXXX XX.X%. third rate third an year's provision million with effective costs and the income in in million quarter. to of compares tax the of an taxes We the the third last a XX.X% quarter quarter, legal $X effective for securities of year in reimbursement This $X.X of taxes for rate related prior of provision a lawsuit.

$X.XX $X.XX income income the GAAP $X.XX share or or net was Pro year million $X.X of diluted forma reported net prior the per of third quarter period. We net compared in period. the as million compared per quarter diluted share forma of earnings income million third the year. for in to quarter to diluted to in income million in were $X.X year $X.X compared XXXX quarter last forma share $X.XX $X.X third pro Pro of the net the per for prior of

GAAP net figures, to income the per forma release. reconciliation to refer pro comparable earnings please and of share For a earnings our

XX, and in equivalents as $XX.X September debt In in XXXX, $XXX terms sheet, and had cash outstanding. of balance of liquidity and we million million

we For under and maintenance facility. operations, our expect the cash operations development from restaurant and borrowings future, capital, foreseeable including finance to new credit through our

For XXXX, we $XX total million to capital $XX our million. to expect expenditures

During of $XX.XX for average purchased X,XXX,XXX excluding approximately shares the $XX.X quarter, price fees. an we or million brokerage

the an did fully in Subsequent within sale sale nor existing of to X the end as loss had to company-operated the third or completed proceeds quarter, result previously the restaurants gain area not any the any Dallas The of cash franchisee. been we impaired. assets

we are the our full follows. revising Turning for to our year outlook guidance for XXXX, as

This $X.XX per We share net share per pro forma compares $X.XX pro XXXX. expect income to of of in $X.XX. to diluted diluted forma net income

assumptions. XXXX in annual for is net on pro following Our guidance share forma the based part income per

growth X% system-wide X%. comparable sales approximately to be expect restaurant We to

noted, our and X franchisees I restaurants. X open to we new open company-owned expect to expect X to As to X restaurants new

of XX.X% costs. fourth the and range tamale XX.X% We expect our and of to associated increased higher in XX.X% of training fees costs quarter compared expectation restaurant delivery food promotion, contribution reflects margin between our the restaurant-level to marketplace This as with adjustment previous XX.X%.

expenses fees advertising change our litigation G&A X.X% action between of reflecting accounting franchise to fees. of to for class legal total securities excluding X.X% expect We revenue and in related

adjusted expect using EBITDA million between and a of tax forma pro income $XX rate million, and We we're XX.X%. of $XX

happy us to again prepared that today. on any to our we answer may now you remarks. for like have. And questions concludes are thank This call the We'd joining you

Operator

Instructions]. [Operator

with comes Our of first SunTrust. from question Bartlett the Jake line

Jake Bartlett

to I wanted figure bundle the October to success September and in just the understand that $X how much First, to attributed of bowl performance or think the and trying out was you just on of combos what's offering. the had about the also, the the different past? $X menu permanently past offer also us, versus you've that had in And remind and that you're some in

Bernard Acoca

Sure.

to, attribute X in both more we and think the due growing as top -- in say, experienced I'd on momentum we important I line So the well, equally the transactions, quarter, things.

of expansion our I was the think delivery fire-grilled capabilities. strength promotion. the combos of it was It the

added both our Uber quarter the I in in say existing the to then addition partner in and improvement. So would Postmates third Eats we operations And is DoorDash.

what internal is Blended the improvement of now we all-time So been significant I the measurement compliments. mentioned, steadily we're has seeing of customer our customer in term at our throughout course And as and high. an overall satisfaction, Index, year increasing

So of I'd all say it was the confluence of X those factors.

combos, added lineup. Specifically we addressing think your main I one, question the is, on that to the nachos $X difference

some So the saw a of and an we had that past with on product. take lot nachos as success LTO in

speaking, it it. of our we one frankly the and a restaurants. Fire-Grilled executed I in contributing to So big was also, think And our But Combos do version with of that both was I think decided how factors. it we $X advertising

Jake Bartlett

what philosophically, the whether is company-owned stores makes in Dallas, something of Houston? lot pursuing. mix, franchise wondering as sale That stores company it. weaker-performing state -- also see versus that's do and of Got some you're the that franchise the I'm markets? in And shedding look towards just in then sense. terms at the moving maybe you the a yourself mix of the of And the you the then more of the

Bernard Acoca

franchisee a significant there stores of Dallas, the case in had opportunity that to market. who sell our to in presence a had we an Well, already

market the is a that made We all partner. unique really animal. of based ownership know knows of transfer part that all it world. So Texas He sense that a us the well. out to local He's strong under for local

be under served better So ownership. local putting we we'd it thought

is things opportunistically. as it performance. them. But improving whether statement, Houston, general say, I that be be we've have to sale at steadily transference make stores as their those the market markets of still and that show And progress. we're in consider been news, market, or Dallas or, franchisees Houston, franchisee company whether we're as a that In sense, of that just it should case we'll mentioned, themselves to committed the good The present to continues looking

Laurance Roberts

I top will restaurants. in And through a opportunistic. go I'd selling But Bernard thing franchise that only having to be major I wouldn't expect of company on the add see as Jake, mix. And us it program shift selling of big Yes. the a is don't highlighted, company

Jake Bartlett

the do past wanting last in it. like a do translate your know on goal? question. that XXXX. And looks you've to in progress improvements then traction It open and starts new And in talked new I stand into Where Got or towards to progress making you're getting here unit same-store market think you sales about two some that When you some the there. growth?

Bernard Acoca

Yes.

of present still day through going in we're as two design a we on but to have X have we simplified new speak. we, agenda, assiduously of our also, been. the X of keeping only third future, our restaurant to markets, massively than ever the with think get the make the those excited the been back-of-house which of finalizing that not to transformation more that's strategic or we've day, aesthetic world pillar design we by lens way brand, we increasingly is more working us markets So in competitive the going our And about, because

don't now, new have So at to on market next track point. open least more at this we with much can share are year right one I but you

Operator

the next Tarantino Our Baird. line of with comes Robert W. from David question

David Tarantino

Just first question on delivery.

on comment be to incremental helpful. what I whether of that secondly, there make special or are curated you not, And that Could then transactions is margin are. seeing think couple works transactions and a And if you're that follow-ups. a guess, little you you've would have I to your it, there a whether maybe in-restaurant could menu how a you there? the explain I think, mentioned that you for difference closer Bernard, then bit

Bernard Acoca

Sure.

we So bifurcated internally pricing termed, have the we delivery call, -- strategy.

we a menu, and actually for pass through website Pollo of And chips marketplaces. Loco and then configurations delivery that, meals Pollo not we -- of, regular price. curated currently whatever that add at orders menu have those to you and and mobile of we're delivery then on we more heavy So smaller or if offer get elpolloloco.com part or El add you retain through Loco full the to customer, through December, app. sales. be through our we a exclusive someone combos, those going on in to emphasis a attached menu salsa marketplaces fees margin our a menu El you're to family customer X entire on go app, price are third-party a Grubhub our we'll fourth X we're on lot If because the XXX% with which so premium those through of found items charge And a we cannot a mobile

going XX% we it loss but call any Let's our on to -- margin to have XX% providers. some have to third-party we it, to although influence I'm franchisees the to markup marketplace a anywhere over given rate let's of don't here, that those from, commission delivery call those include mitigate pricing, products their pay

David Tarantino

of that the And front? you what's kind Or you feedback Anything get customer the overall value you as and customer? to at can on have sort feedback? the do ability been offer the to of the proposition execution look

Bernard Acoca

really I largely in view, thing I an kind from it's of if could mix, more a our of marketplace Yes. our this think at the quarter of take just from -- a in providers. growth sales you look delivery delivery empirical come point only terms mean just I of

from in elevated resistance see charging we're the that those don't channels. we more So necessarily pricing

for there convenience, think and looking first I are foremost. pay consumers to

these about kind excited making the of with And progress so enthusiastic and we're providers. we're

David Tarantino

Larry, that expect P&L the then, to sale And is benefit Great. there the you see from of a restaurants? Dallas

Laurance Roberts

do. we Yes,

the in the I past, other -- provided. I call I'll margin, highlighted the think I've drain it, that markets

an Dallas into next margin restaurants see benefit of go the will we and from as from we should So year. EBITDA see a sale the restaurants the Dallas benefit

David Tarantino

And terms that? would you of us quantifying in help

Laurance Roberts

The basis XX points. somewhere margin benefit should be around

David Tarantino

might that least new at plan to year, one have next you're you're but Great. going franchise I this, enter that terms a growth you point? you mentioned And and on company-operated to I share missed have development at of Do willing this market. then current think in

Laurance Roberts

XX what and and We are that, to restaurant David. next expect would half I probably split it for roughly total year in working now, XX to say range Right still half. would I through be the is

Operator

[Operator Instructions].

Our Guggenheim next line the question Securities. comes of Matthew DiFrisco from from

Matthew DiFrisco

specify, Just were did that make wanted to transferring there to the X market Dallas you also -- entire can were stores franchise? over just say you

Laurance Roberts

Five.

Matthew DiFrisco

not a royalty? are might where okay. as those going any deal as there? be away, them sort Five, there of a abatements will they any Or transferring to have far of have royalty And in some right Is initially? there

Laurance Roberts

Yes.

in I the initial, couple we will So there royalty have basically, no those be think, of -- restaurants. on years,

Matthew DiFrisco

be it'll the this XX -- be aside or I'm selling still accretive getting balance? that from you just proceeds contribution? you P&L are the is earnings offset offset basis or as and far to the getting to But carry improvement that -- margin, return What you're the are the in trying -- buy how EBITDA are lost to to in as point a of basis dollars. stock back think going proceeds to to

Laurance Roberts

Matt. contribution, No. We'll EBITDA positive a get

Matthew DiFrisco

losing money? were They

Laurance Roberts

Yes.

Matthew DiFrisco

Got it.

Okay.

you're gain... you going to the So depreciation. And removed

Laurance Roberts

Well, fully flow an will benefit positive sale the But was or benefit no, there restaurants. impaired. have no from been depreciation be there EBITDA those of restaurants the EBITDA/cash because

Matthew DiFrisco

G&A million guidance number that I'm of X.X a so the of -- some of Excellent. of the And your X.X% sales, of sales, to assuming guidance franchise $XXX doing then of in quarter, as off the here, X.X% so just ad revenue? gross this as inclusive as far percent you're

Laurance Roberts

yes. that, reporting Yes. That's the way we're

Matthew DiFrisco

which $X.X out first back quarter in only the million? then of And the was you legal,

Laurance Roberts

Only I legal back out expenses the $X.X securities associated litigation. quarter we of the million. first Well, in -- with the do

Matthew DiFrisco

year-to-date of total the What's that?

Laurance Roberts

second. $X.X million. Give at a me It's

Operator

question follow-up a have do the We line Bartlett. from of Jake

Jake Bartlett

quarter. the for ask the typically I systemwide every want to sales quarter, I is ask think, This what I but one, were just

Laurance Roberts

$XXX,XXX,XXX, million. $XXX.XX so

Jake Bartlett

have specifically on in California. Southern unique negative? make then you and can perspective are going impact guys on positive a And comments stores your Wondering, you the that any to any California and Great. there wildfires or lastly,

Bernard Acoca

Yes.

very, very So we're carefully. all watching naturally, it

the impact point. far, there stores. say power been extremely in So won't bit or the small little here But to cause a we've impact been number greater minimal. outage has wider, gets not situation has the had It if a -- been this few has it at minimal. of or be this at bigger pretty that It's juncture, for that concern. at of has The least

Laurance Roberts

And mean at Yes. watching just closures, company comp number actual sales time. comp to really really, of impact only this franchise. add seeing as sales, seen a point little we've and I in any more And color, our on a minimal really we're not we're

Jake Bartlett

lastly, I your But sure And Great. to traffic. to strong positive overall. sorry, that -- make but X% same-store you're lapping one you -- then or want had that you're just comment make sales traffic that's September, sure not lapping you're the want actually, was Bernard, made X% -- more. in you were I one referring in X%. question. to

it And I momentum quarter, quarter actually looks know but that. comps. think, looking built heading kind year, fourth the was, of you the the last last it that give can idea progression I us year? of there a went acceleration like meaningful fourth there of beyond same-store the sales Larry, in monthly was at how into of an

just I to So want confirm.

Laurance Roberts

not transaction. think, X% in was That I the First comparison your I comp, the regarding the September. of all, question just mean -- actually first

Jake Bartlett

Great, yes.

Laurance Roberts

year's acceleration in at comps, in saw November if yes, I really you last movement look then mean December. an and And Okay. you

and year, So last and acceleration October roughly in saw then you November are line, September and an December.

Operator

Barish the of Jefferies. Andy comes question next Our from line with

Andrew Barish

new and just A couple some follow-ups of stuff. then

what did -- September Was roll? for the new the most Uber that in month? On of it and Eats, Postmates when

Bernard Acoca

month. kind Yes, starting in was September. most the and of then August, of full for We late effect started in it

Andrew Barish

us ticket. a mix of on Xs just you Can And Okay. the But I up, pricing, on quarter, kind maybe. down then it to combo running is points. was implies give offset moving you're imagine mix like so obviously carries picking $X there? it that a couple With seems high of certainly the the what in an delivery higher mid-

Bernard Acoca

But on Larry go think Yes. the more by, I'll we were encouraged the detail mentioned that steadily bit transactions before, stronger. I through let it. I the little thing quarter as into that was a got

we last of we some steadily there's was been that the was a were that consumer with bit watching spending quarter getting effect how the carefully little while careful the -- because macroeconomic so And a they're or for X, our think that they're dollars. California and their being about stronger, check something improving of where

it's We're So want sustain the We quite quarter. going short-term we than something bit not that do more bit saw little longer-term. a within a little to to sure about if more that? itself. it's think that's Larry, talk But you

Laurance Roberts

Yes.

higher discounting the factors. we did have Just adding little One in there on to other key quarter. what Bernard was highlighting, I a mean were a of couple was

quarter was our versus LTO least price lower lower which we point a The at At a of price have were was beginning one one quesadilla other at at the year. the quesadillas, point. prior

as would a as prices, And check I in think, of -- factor. a I as gas California. what seeing higher a Bernard also result management some think was probably that we're highlighted, call customer here So we

into is getting positive pullback customers we're a real restaurants. terms more more But of seeing little the in We're transaction. So the we spending think getting they're what from people I in are restaurant.

Andrew Barish

And better finally, certainly, in on the it the than looked just labor, Helpful. then year. first of half a lot

or cooking there I'm other the it actually the improvement efficiency anything really the productivity? on the in quarter was and execution? that to create improvements dovetailing been is new But some does labor else product procedures, the some quality specific have comps, of in teams into than for operational So place? of that. putting opportunity ease Or sure, focused is And then

Laurance Roberts

Yes.

easier procedures, -- at So I'll new any start execute procedures. in the pull quality don't better labor cooking we're looking what it as also We our restaurants. And really cooks of to we're question lot out the making easier as a result end execute. plans let easier have of product first. me the making because seeing to with that. is a of that for to The It's

So that. that's driver on real the

processes the talked In was terms little all labor the into inflation. really that mean talked line, terms I the yes, better in earlier going quarter in we'll we unique. we've fourth third on But investments restaurants. we expectations see we're about in to I the we're about see -- continue quarter, call. labor new probably of see did labor year, thing also also continue inflation making to X% nothing a inflation. to so the to we labor, the a that one efficiencies little to which The just manage on of wage bit, helped. rolling We've X.X% mean the some that out

involve that will training So costs.

incremental which So that have of during will our quarter, sales margins. percent labor be impact some some on and will as a the labor costs

a more fourth the So third to or a I see little quarter expect in relative to on quarter. the bit line little cost labor

And the lower the quarter. the thing you other AUVs fourth in highlight quarter, also, third I'd generally have versus

little fourth line in margin on you So quarter. the labor a may the again, bit more see impact

Operator

for hand There to questions queue. are back call in further closing no the remarks. the like to I'd Mr. Acoca

Bernard Acoca

soon. we holiday I a thank joining all with to want to care. everyone to forward their everyone wish And want you look very to I and today, talking of families. Well, happy us for Take

Operator

Ladies this you today's and teleconference. Thank gentlemen, your participation. does conclude for

lines You your have at this may day. and time, a disconnect wonderful

El Pollo Loco (LOCO) 31 Oct 192019 Q3 Earnings call transcript